Smart Home Loan repayment options

If securing a home loan is a gigantic task, its repayment is even more daunting. No wonder, people face a hard time committing to the distant but inevitable goal of settling their home loans.

Here are a few smart options in line with the demands of different circumstances:

For Young loan-takers:

If you have taken a home loan during the early phase of your career, you can consider a Step-up repayment plan, where EMIs increase in tandem with career progression.

As a result, EMIs are lower in the initial years, and increase with the rising income as you move up the career value chain.For Middle-aged Borrowers:

Home borrowers in later career years should ideally choose Step-down repayment plan, exact opposite of the step-up plan.

Given the repayment liabilities of retirement years, it’s prudent to repay as much as possible in the early phase so as to escape the financial hassles of the long-run.

Income flow-adjusted:

Borrowers also have the option of an accelerated repayment plan wherein EMI increases during times of surplus money or more disposable income in hand.

In this option, a borrower can set aside cash with a lump sum repayment target in mind at some point in time.

Tranche Repayment:

Here a borrower can fix an amount, supposed to be paid to the bank, until the completion of property construction.

This way, the borrower pays minimal interest amount and the payment over and above is adjusted in the principal. This alternative is best suited to those who have purchased an under-construction house or apartment.